EDBA BUS 150 INTRODUCTION TO BUSINESS ADMINISTRATION

1. EDBABUS 150INTRODUCTION TO BUSINESS ADMINISTRATION MAZLOMI INURUL AKMAR BT. MOHD. NOR

2. CHAPTER 1THE NATURE OF BUSINESS

3. WHAT IS BUSINESS? • An individual or organization that provides goods, ideas and services to others who want or need them • The outcome are products: tangible intangible • The product provides satisfaction and benefits

4. BASIC CONCEPTS OF BUSINESS • Profit • Entrepreneurship • Risk taking

5. GOAL OF BUSINESS • To maximize profits • Balance the needs of stakeholders • Not all organizations are business

6. PURPOSE OF BUSINESS • To supply goods and services to customers, rather than to supply jobs to workers and managers, or even dividends to stockholders • To have healthy and growing sales • New product development or new services • Cost control or lowering of costs • To create wealth for shareholders, employees, customers and society at large

7. RATIONALE OF BUSINESS • Make or provide good and quality goods, ideas and services • Make or provide reasonably-price goods, ideas and services • To fulfill the needs of consumers

8. BUSINESS FIRM • An organization under one management • Set up for earning profit • Providing goods, ideas and services • Sale in market

9. BUSINESS ENVIRONMENT • Economics condition • Legislation • Technological process • Socio-cultural environment • Competition • Globalization

10. CHAPTER 2THE ROLE OF PROFIT IN BUSINESS

11. DEFINITION OF PROFIT • The difference between what it costs to make and sell a product and what a customer pays for it • The reward for the risks they take in providing products

12. THE IMPORTANCE OF PROFIT • To earn profit, an organization needs: • Management skills • Marketing expertise • Financial resources • Business must produce quality products, operates efficiently

13. CHAPTER 3CONTRIBUTIONS OF BUSINESSTO SOCIETY

14. CONTRIBUTION OF BUSINESS TO SOCIETY • Employment creation • Economic growth (GDP) • GDP measures both the total income earned in the economy and the total expenditure on the economy’s output of goods and services • Level of real GDP is a good gauge of economic prosperity • Growth of real GDP is a good gauge of economic progress

15. CONTRIBUTION OF BUSINESS TO SOCIETY • Improved standard of living • The amount of goods and services people can buy with the money they have • Improved quality of life • The general well-being of a society in terms of political freedom, a clean natural environment, education, health care, safety, free time and many others that leads to one’s happiness and satisfaction • Peace and prosperity

16. CHAPTER 4EXPLOITATION OF SOCIETYBY BUSINESS

17. BUSINESS ETHICS • Principles and standards that determine acceptable conduct in business organization • Acceptability of behaviour in business is determined by customers, government, interest group, competitors • The organizational culture must be strong • Relates to an individual’s or work group • Relates to the culture in which a business operates

18. SOCIAL RESPONSIBILITY • Business’s obligation to maximize its positive impact and minimize its negative impact on society • Concerns the impact of the entire business’s activities

19. STAKEHOLDERS OF BUSINESS • People or parties that stand to gain or lose by the policies and activities of a business • Shareholders • Customers • Suppliers • Bankers • Government agencies • Competitors

20. ETHICAL ISSUES IN BUSINESS • Ethical issue is an identifiable problem, situation or opportunity that requires a person to choose from among several actions that may be evaluate as right or wrong, ethical or unethical

21. ETHICAL ISSUES IN BUSINESS • Abusive and intimidating behaviour • Physical threats, insults, profanity, yelling • Conflict of interest • Whether to advance a person’s personal interests or those of others • Separate personal financial interests from business dealings • Example: bribes

22. ETHICAL ISSUES IN BUSINESS • Fairness and honesty • Relate to the general values of decision makers • Not to harm customers, clients or competitors • Communications • False and misleading advertising • Truthfulness about product safety • Business relationship • Behaviour of businesspersons toward customer, suppliers and other in workplace

23. IMPROVING ETHICAL BEHAVIOURIN BUSINESS • Code of ethics • Policies on ethics • Ethics training programs

24. NATURE OF SOCIAL RESPONSIBILITY • Economics • Earning profits • Legal • Obeying the law • Ethical • Doing what is right, just and fair • Voluntary • Being a good citizen

25. SOCIAL RESPONSIBILITY ISSUES • Relations with owners and stockholders • Employee relation • Consumer relation • Environmental issues • Community relations

26. CHAPTER 5TYPES OF BUSINESS

27. SOLE PROPRIETORSHIP • Owned by one person • Advantages: • Total independence in making decisions • Sole ownership of profits • Pay only personal income tax and not business tax • Low set-up cost

28. SOLE PROPRIETORSHIP • Disadvantages: • Entirely responsible for debts and risks • Unlimited personal liability • Limited access of capital • Limited skills and capabilities • Feeling of isolation • Short life of business

29. PARTNERSHIP • Owned by two or more persons • Partners are joint owners of the business and share profits, loses and risks • Not a separate legal entity from its owner • Types of partners: • Limited partner • General partner

30. PARTNERSHIP • Advantages: • Easy and cheap set-up cost • Able to raise more capital • Tax advantage • Disadvantages: • At least one partner has unlimited liability • Lack of continuity • Difficulty to raise large sum of capital • Bound by the act of one partner

31. CORPORATION • Legal entity separate from its constituent members • Formed by several persons who are able to own property, draw contracts and employ people • Three types of corporation: • Limited by shares • Limited by guarantee • Unlimited corporation

32. CORPORATION • Advantages: • Limited liability • Easy to raise capital through sale of shares • Able to transfer ownership • Relative permanence of existence • Increase expertise and skills • Able to delegate authority

33. CORPORATION • Disadvantages: • Activities limited by law • Costly incorporation process • Double taxation • Loss of control by the founder • Regulation

34. SMALL BUSINESS • Independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people • Advantages: • Independence • Costs • Flexibility • Focus • Reputation

35. SMALL BUSINESS • Disadvantages: • High stress level • High failure rate • Undercapitalization • Managerial inexperience or incompetence • Inability to cope with growth

36. MULTINATIONAL CORPORATION • Firms having operations in more than one country, international sales and a nationality mix of managers and owners • Examples: • International computer goods • Electronics goods • Consumer goods • Depends on the international market for a large percentage of their total revenue

37. CONGLOMERATES • A company that consists of multiple distinct businesses • Unrelated businesses • Large and can be formed by merging more than three businesses together • The term may also refer to a multi-industry company

38. CONGLOMERATES • Advantages: • Allow capital to be allocated in a more efficient way • More efficient allocation of capital • Disadvantages: • Lack of focus and inability to manage unrelated businesses equally • Stocks are usually penalized by the market

39. CO-OPERATIVES • Composed of individuals or small businesses that have banded together • The set-up is not to make money • The creation is to create enough profit to maintain the organization • It can help distribute the products of its members

40. CHAPTER 6THE BASIC BUSINESS PROCESS

41. INPUT-OUTPUT MODEL • Inputs • Transformation or conversion • Outputs

42. INPUTS • Labour • Money • Materials • Energy

43. CONVERSION PROCESS • Combines inputs in predetermined ways using different equipment, administrative procedures and technology to create products • To ensure that the process generates quality products, control must be made

44. CONVERSION PROCESS • Take measurements at various points • Take actions for any deviation • Different types of transformation process take place in different organizations

45. OUTPUTS • Final products differ from each other • Human and technological elements associated with a service • Customer services

46. MANAGING THE BUSINESS PROCESS • Process focus • Product focus • Repetitive focus

47. CHAPTER 7MANAGING THE OPERATIONS OF BUSINESS

48. OPERATIONS MANAGEMENT • Sets of activities that creates goods and services through the transformation of inputs into outputs • Deals with the design, direction, control, integration and improvement of the processes • The main goal is to ensure the efficient transformation of production

49. OPERATIONS MANAGEMENT • Doing of work for things like superior quality, speed-to-market, low costs • Excellence in operations can become a competitive advantage • Closely coordinated with inventory control

50. GOALS OF OM • Productivity • Quality • Innovation • Customer satisfaction • Profitability